Article 12 State Test and contractual power rights defeated claims of discrimination and mandatory interim relief.

A company is not treated as State under Article 12 unless the recognised indicia of governmental ownership, financial support, monopoly, pervasive control, or public function are shown; on the facts, those indicia were absent, so Article 14 did not apply. A resolution withdrawing instalment facilities was found to have been applied uniformly to defaulting participants, and no selective or discriminatory enforcement against the appellant was established. A shareholder's right to power allocation under the memoranda was only a qualified contractual entitlement conditioned on payment, so disallocation for default did not amount to oppression and did not justify interim mandatory injunction relief.

---

---

Issues: (i) whether the respondent-company was State within Article 12 and therefore subject to Article 14; (ii) whether the resolution dated 16-3-2001 was uniformly implemented so as to avoid discriminatory treatment; (iii) whether disallocation of the appellant's power share amounted to oppression of a minority shareholder and justified interim mandatory relief.

Issue (i): whether the respondent-company was State within Article 12 and therefore subject to Article 14.

Analysis: The indicia for treating a corporation as an instrumentality of the State are the existence of Government shareholding, financial assistance, monopoly status, deep and pervasive State control, public importance of functions, and transfer of a Government department. The respondent was not Government-owned, received no State financial assistance, had no monopoly, and was not subject to deep and pervasive State control. The rights enjoyed by A.P. Transco under the memoranda were contractual and voluntary, not the result of statutory compulsion. Generation and supply of electricity, in the circumstances of the case, were not treated as an exclusively governmental function so as to bring the respondent within Article 12.

Conclusion: The respondent-company was not State under Article 12 and was not bound by Article 14.

Issue (ii): whether the resolution dated 16-3-2001 was uniformly implemented so as to avoid discriminatory treatment.

Analysis: The record showed that the resolution withdrawing instalment facilities and enforcing the consequence of non-payment was applied to other defaulting participating industries as well. The apparent difference in treatment with respect to A.P. Transco was explained by a bona fide dispute regarding its liability, which was under examination. The appellant's liability was undisputed, and the materials did not establish selective enforcement of the resolution against the appellant.

Conclusion: There was no discriminatory or unequal application of the resolution.

Issue (iii): whether disallocation of the appellant's power share amounted to oppression of a minority shareholder and justified interim mandatory relief.

Analysis: The appellant's entitlement to power under the memoranda was a qualified contractual right conditioned on payment for energy consumed. A defaulting participant could not insist on continued allocation irrespective of dues, especially when non-payment shifted the burden onto compliant shareholders and affected the respondent's operating costs. On that footing, no legal right of the appellant was shown to have been violated, and no breach of legal obligation by the respondent was established for grant of mandatory interim injunction.

Conclusion: The disallocation did not amount to oppression, and interim mandatory relief was not warranted.

Final Conclusion: The appeal failed on all substantive grounds and the refusal of interim relief was upheld.

Ratio Decidendi: A company is not State under Article 12 unless the recognised indicia of governmental character, control, or function are made out, and a qualified contractual right to supply cannot be enforced by mandatory injunction in favour of a defaulting beneficiary absent breach of legal obligation by the counter-party.

---